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FXCM To Forgive 90% Of Clients With Negative Balances

FXCM To Forgive 90% Of Clients With Negative Balances
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FXCM Inc (NYSE: FXCM) announced Wednesday that it will not pursue 90 percent of its clients who incurred negative balances as a result of extreme price movements following a Swiss National Bank decision two weeks ago.

Shares traded up more than 6 percent at $2.53 shortly after the opening bell.

Despite the forgiveness, FXCM will pursue roughly 60 percent of the total debit balances, which are all concentrated within 10 percent of clients. FXCM identified these individuals as institutional, high net worth and experienced traders with higher account balances.

The negative balances almost forced FXCM into insolvency; however, the company was able to secure a $300 million loan from Leucadia National Corp. (NYSE: LUK). The terms of the deal were severe, and FXCM is looking to sell non-core assets to raise cash.

Image credit: Baiknour, Wikimedia

Posted-In: News Best of Benzinga


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